Through Decree No. 220/025, issued on 23 October 2025, the Ministry of Economy and Finance established that, between 15 November 2025 and 30 April 2026, a full value-added tax (VAT) exemption will apply to various activities within the tourism sector if the purchasers are nonresident individuals and the payments are made using (1) a credit or debit card issued abroad or (2) other electronic payment instruments funded from abroad, provided that the acquirer or the collection entity is resident in Uruguay. The initiative aims to continue supporting the tourism industry through tax incentives designed to promote the use of electronic payment methods. (For background, see EY Global Tax Alerts: Uruguay extends application of reduced VAT rate for tourism sector through 30 April 2026, dated 5 May 2025; Uruguay extends application of reduced VAT rate for tourism sector until 30 April 2025, dated 27 September 2024; and Uruguay introduces zero VAT rate on hotel-related services to resident tourists for the summer season, 16 January 2024.)

Activities eligible for the reduced VAT rate include:

• Gastronomic services provided by restaurants, bars, canteens, cafés and similar establishments
• Catering services for parties and events
• Services for parties and events are not included above
• Car rental services without a driver

Decree No. 220/025 was not yet been published in the Official Gazette but it can be accessed here (PDF, Spanish only).

Implications

Businesses in the tourism sector should consider highlighting this tax incentive among their customers by encouraging the use of electronic payments during the extended period, with the aim of stimulating sector activity.